oright! time to seek some help from the Pros. valuations given as of today, so covid inflated. current state: PPOR around sydney (12 km from cbd), value ~ 1.65M; loan 200k, cash at offset ~ 120k IP1 - ingle farm (SA). house with potential to subdiv, value ~ 470k, loan 250k IP2 - parkwood (QLD), house, small block no subdiv, value ~ 580k, loan 280k both properties generate ~ 880$/week gross rent (low, but lease renewal signed during covid before market went bonanza). both IPs on P+I so they are beeing paid of slowly. two dependents, borrowing capacity currently high, ~ 1M, and with equity in PPOR we could borrow the entire 100% of IP3+4. CF isnt a problem, and I dont plan to quit my job, i like it. the goal is to achieve net flow of ~ 1200$ a week income from rent, net, in 10 years from now. I never done any development/subdivision but dont mind to try once. backup plan just to have 3-4 IPs with minimal/no mortgage so i can if i choose to retire from day job. so what would be the best path forward? 1. going comercial? i have no experience with comercial apart from reading about it. if CG is potentially good, then thats seems like a good option. 2. buying 2-3 more IPs over next 1-2 years, 350-400k each. if each will rent at ~ 400 a week that should also bring me there. 3. buying more expensive, 1-2 IPs 500k each with GF on (or put one myself) that would also generate higher rental. 4. i guess most important is the where. trying semi regional (townsville/cairns) or closer to capitals (rockingham/ipswitch/newcastle if i could afford) any thoughts would be mostly welcome!
You are doing well, non-deductible debt nearly paid off and you are more than half way to your goal now. I would beware of regional towns though.
1. going commercial? i have no experience with commercial apart from reading about it. if CG is potentially good, then thats seems like a good option.[/QUOTE] Potential for CG for commercial can occur if you buy under-rented properties then lifing the rental. Also by changing the use and fully utilising the site.
If it were me (not saying you should do it), assuming the income is strong and you are paying tax, I would go all out $1m into a house in Melb or Syd in a "max cg" type sub (with crappy yield), hold for 10 years then dump and convert to comm prop or shares. The Y-man p.s. that's what we've done.
Thank you. Would you do it "soon" or wait till SYD/Mel go down a little? i know one shouldnt time the market but...
Imo timing the market is very important. When I say " Timing the market " I mean approx timing. Not crystal ball stuff. Then time in the market (and staying the course) is crucial. Many unfortunate investors sold just pre Brisbane boom. Ouch.
Imo time in the market is very important. When I say " Time in the market " I mean lots of time ten. twenty, thirty ,forty fifty years plus. Buy and then staying the course is crucial. Many unfortunate investors buy and then sell wasting a lot of transactional cost .Ouch.
Thank you everyone! I did indeed sold two units in inner sydney over course of 6 years, one was investment one ppor, but that really enabled me to buy more, since refinancing wasnt an option. as a newbie investor we made some nice profits on them and we are happy with outcome. hopefully no more sales in forseeble future
I think that is a smart move sometimes selling and moving onto better product which give more CG and is a better proposition. I have seen people buy just buy CF properties.. issue is they are not factoring CF bleed in terms of maintenance. C F
so unit1 we bought in 2013 as investment when we just arrived. issue is that i was only one working and we knew nothing about realestate apart from "get into it" (we come from diff mentality and no investment education). we bought for ~ 520k, ~ 8% below asking (negotiations and approvals on hand). Rented and cf +ve from day 1. We were renting 1 bedder across the road. 2015/16 – had to get our own ppor with 1st kiddo on the way – but couldn’t borrow much because partner was still a student and for us location was more important and we didnt want to rent with baby on hands. So we sold unit1 for ~ 710k and used the proceeding to buy our own unit2 in Redfern for similar price. it was old, non renovated place in established red brick complex with low strata. We fixed it up and similar units sold for ~ 850k back then. just recently with 2 kids had to get large place, this time proper house. we actually kept unit2 for a year and even during covid had zero empty days, always rented and cf+ve. but we decided to sell to cover the mortgage on ppor house. unit2 sold for >1M. so overall its not bad for units, though of course i acknowledge if we were to buy a house in 2013 somewhere in west or hills would have made more but oh well PS the PPOR house we bough during covid meltdown for under 1.2M and did it up (removed wall, added bathroom/toilet etc). we managed ourselves but we arent builders or anything. just spent hours online looking for tradies etc. timing was great, so we were really lucky. thats how current valuation is high.
update: ended up getting a 3 bdr stand alone in Rockingham and Townsville. both rented out. Rocky maybe overpaid a bit but who knows. thank you all for your advice and guidance!
